The diplomatic crisis between India and the U.S. sparked by the case of Indian consular official Devyani Khobragade has hit new setbacks, with an indictment extension refused by an American judge and fresh retaliatory measures taken against the U.S. embassy in New Delhi.

Khobragade, then deputy consul general in New York City, was arrested last month on accusations of submitting false visa documents with respect to her maid and of not paying the maid a minimum salary. The handcuffing and strip search of Khobragade by U.S. marshals sparked protests in India and demands from New Delhi that all charges to be dropped.

Currently, the clock is ticking for a settlement to be reached before Khobragade is indicted, which must happen within 30 days of her arrest — Jan. 13 at the latest — after which it will be markedly more difficult to conduct plea negotiations and find a diplomatic resolution to the case.

A request made by Khobragade’s attorney Daniel Arshack for the indictment deadline to be extended was refused on Wednesday by a federal judge. U.S. prosecutor Preet Bharara says an extension is not necessary, since authorities have already outlined “reasonable parameters for a plea that could resolve the case, to which the defendant has not responded.”

Meanwhile, India has forced the U.S. embassy in New Delhi to close down its commercial activities, including a popular social club, and has said all diplomat and embassy-staff vehicles in the country will be subject to local laws.

“We’re not hostile, this is an arrangement based on reciprocity,” External Affairs Minister Salman Khurshid told the Hindustan Times regarding the latest retaliatory measures.

In the past week, Indian authorities have also claimed that they have discovered cases of tax and other legal violations by U.S.-embassy staff members in New Delhi, including the sale of duty-free alcohol to those who are not legally entitled to it.

Ministry of External Affairs spokesman Syed Akbaruddin has said the Khobragade case “severely undermined” relations between the two countries.